Money Laundering Through Jamaican Real Estate: How Criminal Proceeds Are Hidden in Property and What MOCA Can Do About It

• Real estate is used in Jamaica to launder criminal proceeds through cash purchases, nominee ownership, and inflated transactions
• The Proceeds of Crime Act empowers the court to forfeit property acquired with the proceeds of crime regardless of current ownership
• Attorneys handling property transactions are required under anti-money laundering regulations to conduct customer due diligence and report suspicious transactions
• An innocent buyer who purchases property that is subsequently forfeited as proceeds of crime may have a statutory claim to be compensated
• MOCA and the Financial Investigations Division have joint responsibility for investigating property-based money laundering in Jamaica

Real estate is a preferred vehicle for money laundering in Jamaica because property transactions involve large sums, the origins of funds are not always scrutinised, and once a property is acquired and resold, the provenance of the original purchase price becomes difficult to trace. The most straightforward form of property-based money laundering involves the purchase of a property with cash derived from criminal activity — typically drug trafficking, fraud, or extortion — so that the funds, previously held in untraceable cash, are converted into a registered asset that can be sold, mortgaged, or used as evidence of legitimate wealth. More sophisticated schemes involve nominee ownership — where the true beneficial owner uses the name of a family member, employee, or company to hold the property and obscure the connection to criminal proceeds — or inflated sale transactions, where a buyer and seller agree on a stated price that is higher than the actual amount exchanged, with the difference representing an injection of criminal funds that appears as legitimate proceeds of sale.

Professional Obligations and the AML Framework

Attorneys, real estate agents, and other designated non-financial businesses and professions involved in property transactions in Jamaica are subject to anti-money laundering obligations under the Proceeds of Crime Act and the associated regulations. These obligations require them to conduct customer due diligence before acting, to verify the identity and, where relevant, the source of funds of their clients, and to file suspicious transaction reports with the Financial Investigations Division (FID) where they form a suspicion that a transaction involves the proceeds of crime. Failure to comply with these obligations exposes the professional to regulatory sanction and, in cases of deliberate facilitation of money laundering, to criminal prosecution. The GLC actively supervises attorneys’ compliance with anti-money laundering obligations in property transactions, and the Real Estate Board does the same for registered dealers and developers.

Risk to Innocent Buyers and the Forfeiture Framework

The Proceeds of Crime Act provides for the forfeiture of property that represents or was acquired with the proceeds of crime, and a forfeiture order can in principle be made against property that has subsequently been transferred to an innocent third party, though the Act contains provisions intended to protect bona fide purchasers for value without notice. A buyer who can demonstrate that they purchased a property for full market value without knowledge that it represented criminal proceeds has a stronger claim to resist or receive compensation for a forfeiture order than a buyer who paid below market value or who failed to conduct adequate due diligence. Buyers who are concerned about the provenance of the funds used to acquire a property — for example, where a vendor is unable to explain the source of funds used to purchase the property originally — should treat that as a risk factor and seek legal advice before proceeding. Reporting concerns to the FID via the Financial Investigations Division is also available to members of the public who suspect property-based money laundering.

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